The accountant records it as an asset. Why?

• It increases business profit

• Computer loses value over time

• It gives benefit for many years

• It is bought from business profit

A debtor pays ₹5,000 in cash. Which accounts are affected?

• Sales A/c and Debtors A/c

• Debtors A/c and Purchases A/c

• Cash A/c and Debtors A/c

• Only Cash A/c

The 'dual aspect' principle in accounting implies:

• Every transaction affects only assets

• Every transaction affects both sides of the accounting equation

• Income = Expenditure

• Owners and business are the same

A proprietor takes goods for personal use. What is the correct journal entry?

• Purchases A/c Dr. To Drawings A/c

• Drawings A/c Dr. To Purchases A/c

• Capital A/c Dr. To Sales A/c

• Cash A/c Dr. To Drawings A/c

Which of the following is not part of the accounting cycle?

• Journal

• Ledger

• Trial Balance

• Audit

Which of these is a real account?

• Capital A/c

• Furniture A/c

• Commission A/c

• Rent A/c

Purchases from Sharma of ₹5,000 were wrongly recorded as sales. What is the rectification entry?

• Sales A/c Dr. ₹5,000; To Sharma A/c

• Purchases A/c Dr. ₹5,000; To Sharma A/c

• Sales A/c Dr. ₹5,000; Purchases A/c Dr. ₹5,000; To Sharma A/c ₹10,000

• Sharma A/c Dr. ₹10,000; To Sales A/c

Which of the following is not shown in a Trial Balance?

• Outstanding Expenses

• Accrued Income

• Closing Stock

• Capital

Which transaction will not change the total of the accounting equation?

• Payment of salary

• Purchase of goods on credit

• Goods destroyed by fire

• Exchange of furniture for computer

A bank overdraft is shown as:

• Asset

• Expense

• Liability

• Contingent asset